Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 386: The Effects of Artificial Intelligence on Jobs: Evidence from an AI Subsidy Program

Mark Hellsten (), Shantanu Khanna (), Magnus Lodefalk () and Yaroslav Yakymovych ()
Additional contact information
Mark Hellsten: University of Tubingen
Shantanu Khanna: Northeastern University
Magnus Lodefalk: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Yaroslav Yakymovych: Uppsala University

Abstract: Artificial intelligence (AI) is expected to reshape labor markets, yet causal evidence remains scarce. We exploit a novel Swedish subsidy program that encouraged small and mid-sized firms to adopt AI. Using a synthetic difference-in-differences design comparing awarded and non-awarded firms, we find that AI subsidies led to a sustained increase in job postings over five years, but with no statistically detectable change in employment. This pattern reflects hiring signals concentrated in AI occupations and white-collar roles. Our findings align with task-based models of automation, in which AI adoption reconfigures work and spurs demand for new skills, but hiring frictions and the need for complementary investments delay workforce expansion.

Keywords: Artificial intelligence; Labor markets; Hiring; Task content; Technological change

JEL-codes: J23; J24; O33

Language: English

27 pages, November 14, 2025

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